HM Treasury

Capital payment to International Financial Institution - Contingencies Fund and Contingent Liability

Greg Hands: The Treasury has agreed to be a founder contributor of the Asian Infrastructure Investment Bank (AIIB). As set out in the Summer Budget 2015, HM Treasury will soon be making the initial instalment of US$122,180,000 (approximately £80 million). Subsequent payments of the same amount will be made over the next four years. The UK’s overall capital contribution will total approximately £2 billion (US$3,054,700,000), with these five payments together making the 20% “paid-in” capital contribution requiring a cash transfer. The other 80% is “callable capital” – the AIIB can call on it if needed. As the paid-in capital is an investment, in return for which we get an asset of a new Bank, the Office for Budget Responsibility has forecast this payment as a financial transaction. Financial transactions do not add to Public Sector Net Borrowing.As the cash for this payment will form part of HM Treasury’s Supplementary Estimate 2015-16, which is expected to achieve Royal Assent in the associated Supply and Appropriation Bill in mid- to late March, HM Treasury will use the Contingencies Fund to make the payment.This payment is in line with the authority provided by this House under the Asian Infrastructure Investment Bank (Initial Capital Contribution) Order 2015. Parliamentary approval for additional capital of £83 million for this new expenditure will be sought in a Supplementary Estimate for HM Treasury. Pending that approval, urgent expenditure of £83 million (to allow for exchange rate movements) will be met by repayable cash advances from the Contingencies Fund.Further, the payment of the first instalment of the capital contribution incurs with it a contingent liability. In line with the Articles of Agreement, the contingent liability rises in line with the amount of callable capital paid. As such, the UK will incur a proportionate contingent liability of US$488,752,000. A Departmental Minute to this effect was laid before Parliament on 30 November 2015 to give at least 14 sitting days’ notice of the intent to incur a contingent liability. The notice period was completed on 5 January 2016.Although the AIIB has the right to call for payment of this callable capital if there is a crisis affecting the bank’s assets or loans, no such instance has occurred in any major multilateral development bank (MDB) in the past. If the liability were to be called, provision for any payment would be sought through the normal Supply procedure.In joining the AIIB the UK is demonstrating its support for China’s initiative to establish the AIIB to address the historic shortage of infrastructure investment in Asia. The AIIB will support economic growth in the region and drive up living standards. The UK’s membership will deepen economic ties with Asia and create opportunities for British businesses.


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Department for Work and Pensions

Diffuse Mesothelioma Payment Scheme Levy 2015/16

Justin Tomlinson: The Diffuse Mesothelioma Payment Scheme (Levy) Regulations 2014 require active insurers to pay an annual levy based on their relative market share for the purpose of meeting the costs of the Diffuse Mesothelioma Payment Scheme (DMPS). This is in line with the commitment by the insurance industry to fund a scheme of last resort for sufferers of diffuse mesothelioma who have been unable to trace their employer or their employer’s insurer. I can announce today that the total amount of the levy to be charged for 2015/16, the second year of the DMPS, is £23.2m. It is estimated that the full cost of the scheme in 2015/16 will be £31m, but, as the amount levied in 2014/15 was greater than the final cost of the scheme for that year, £7.8m has been carried forward into 2015/16. The £23.2m will be payable by active insurers by the end of March 2016. Individual active insurers will be notified in writing of their payment amount (i.e. their share of the levy), together with how the amount was calculated and payment arrangements. Insurers should be aware that it is a legal requirement to pay the levy within the set timescales. I am pleased that the DMPS has seen a successful first year of operation, the first Annual Report for the scheme was published in November 2015 and is available on the gov.uk website. I hope that members of both Houses will welcome this announcement and give the DMPS their continued support. 


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Department for Business, Innovation and Skills

Labour Market Enforcement

Sajid Javid: My Rt hon Friend the Secretary of State for the Home Department (Theresa May) and I will today publish the Government’s response to the consultation “Tackling Exploitation in the Labour Market”. The consultation paper was published on 13 October 2015 and the consultation closed on 7 December 2015. The consultation sought views on four proposals: Creating the role of Director of Labour Market Enforcement to set the strategic priorities for labour market enforcement bodies (the Employment Agencies Standard Inspectorate, Her Majesty’s Revenue and Customs’ National Minimum Wage team and the Gangmasters Licensing Authority) in an annual labour market enforcement strategy;Allowing data sharing between the Director, the Intelligence Hub, labour market enforcement bodies and other bodies with intelligence that inform the preparation of the labour market enforcement strategy;Creating a new labour market undertaking and enforcement order regime, backed up by a criminal offence and custodial sentence – to allow us to tackle repeat labour market offenders and rogue businesses; andReforming the Gangmasters Licensing Authority to become the Gangmasters and Labour Abuse Authority with stronger powers to tackle labour exploitation across the economy. The consultation responses gave broad support for the Government’s proposals. Therefore we will introduce these measures to tackle labour market exploitation, secure decent, lawful working conditions and make sure that people receive the rights and wages to which they are entitled. My hon Friend the Home Office Lords Minister will today table amendments to the Immigration Bill to bring these measures in to law. The Government response document, which sets out further detail, can be found on the GOV.UK website.  


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Foreign and Commonwealth Office

Gifting of equipment to the 4th Land Border Regiment of the Lebanese Armed Forces

Mr Philip Hammond: It is the normal practice when a government department proposes to make a gift of a value exceeding £300,000 for the department concerned to present to the House of Commons a minute giving particulars of the gift and explaining the circumstances; and to refrain from making the gift until fourteen parliamentary sitting days after the issue of the minute, except in cases of special urgency.The crisis in Syria is having a direct effect on its neighbours, particularly in areas adjacent to Lebanon’s eastern border. The UK remains firmly committed to Lebanon’s stability, and in supporting the Lebanese Armed Forces (LAF) to minimise contagion from the Syrian conflict, and to combat the spread of Daesh. As part of this commitment, since 2012, the UK has been assisting the LAF, through the Rapid Land Border Security Assistance Project, to establish and mentor the LAF Land Border Regiments (LBRs). The mission of the LBRs is to observe, identify, deter and deny activities by illegal armed actors in the near border areas, in line with agreed international human rights standards. Between 2012 and 2015 around £26m of Conflict Pool and Conflict Security Stability funds were allocated to provide observation, protection, mobility and communications equipment to 1, 2, and 3LBRs, and to establish the lead elements of a 4th LBR, as well as a programme of training and mentoring.The command element of 4LBR has been established, and 4LBR is preparing its deployment plan to cover the remaining 25% of the borders with Syria from Arsal to Masnaa. Recent actions in the Arsal area, and the threat that Daesh poses to UK interests, make it imperative that the LAF completes the expansion of the LBRs southwards, as part of an overall strategy to bring the entire eastern border with Syria back under the authority of the State.Subject to assessment under the Consolidated EU and National Arms Export Licensing Criteria, we intend to gift a package of £967,450.00 of Personal protection equipment to start the establishment of the 4th Land Border Regiment of the Lebanese Armed Forces. The proposed gift will be funded by the Government’s Conflict, Security and Stability Fund and will consist of the following UK sourced equipment:Personal Protective Equipment. £967,450.00The proposed gift is being scrutinised to ensure that it is consistent with export controls and complies with our international obligations. The proposed gift has been scrutinised and approved by a senior, cross-Whitehall Conflict, Stability and Security Fund (CSSF) Approval Board, which has confirmed that it fits with the Government’s strategic and delivery objectives. Foreign and Commonwealth Office officials also assessed the project for human rights risks, using the Overseas Security and Justice Assistance guidelines established by the Foreign Secretary in 2011.The Treasury has approved the proposal in principle. If, during the period of 14 parliamentary sitting days beginning on the date on which this minute was laid before the House of Commons, a Member signifies an objection by giving notice of a Parliamentary Question or a Motion relating to the minute, or by otherwise raising the matter in the House, final approval of the gift will be withheld pending an examination of the objection.


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Department for Environment, Food and Rural Affairs

December Environment Council

Rory Stewart: I attended the EU Environment Council in Brussels on 16 December. I would like to update the House on the matters discussed. Draft Council Conclusions on the Mid-Term Review of the EU Biodiversity Strategy to 2020 The Conclusions were adopted, and were welcomed by Ministers and the Commission who also underlined that further work was still needed to meet the Strategy’s objectives by 2020. Member States also noted the importance of the EU Nature Directives and the need to retain them in their current form to provide certainty and avoid any diminishing of standards. The UK raised concerns over the implementation of the Nature Directives. It concluded that the best way to address these would not be through reopening the Directives themselves, but instead through looking at much better approaches to implementation.  National Emission Ceilings Directive The Council adopted a general approach on the National Emission Ceilings Directive. Following negotiations in the Council, the Presidency secured a comfortable qualified majority for its compromise text. Denmark, Poland, and Austria voted against and Germany abstained. Although the Commission emphasised that it would prefer a higher level of ambition, it supported the Presidency’s push to move to the next stage of negotiations. Notwithstanding their national position, the Netherlands reassured Member States that, as Presidency, they would defend the position reached by the Council in forthcoming negotiations with the European Parliament. The UK welcomed the agreement whilst indicating the very limited room for manoeuvre during the future negotiations with the European Parliament. Any Other Business: Circular Economy  Under any other business, the Council took note of information provided by the Commission on the recently published Circular Economy package. Member States welcomed the package, although a number of concerns were raised. The UK regretted that insufficient attention was shown to potential benefits the circular economy could bring on jobs and growth, and raised concerns about the target-based approach. Negotiations will begin in earnest in January 2016. Any Other Business: Paris Climate Change Summit All Ministers signed a congratulatory letter to the French Presidency of the Paris Summit, and Ministers were thanked for their support and unity during the negotiations. The Commission described the outcome as a triumph for EU cooperation and for multilateralism more generally, while noting the EU’s role in building the influential High Ambition Coalition. The Commission set out its next steps: to draft a Council Decision for signing of the Paris agreement; progress the negotiations of revision of the EU Emissions Trading System (ETS); produce legislative proposals for ‘effort sharing’ of reductions outside the EU ETS including land use considerations; and make proposals on the decarbonisation of transport. Any Other Business: Further Points Council noted information provided by the Presidency, supported by seven Member States, on the challenges and options for improving implementation of legislation on chemical products in scope of Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) legislation. Council also noted information provided by Sweden on sustainable methods of producing and consuming medicines and managing the resulting waste. The Commission was about to launch a study on the environmental impacts of such substances. Council further noted information provided by Greece on the forthcoming meeting of the Contracting Parties (COP10) to the Barcelona Convention. Council noted information provided by Belgium on reducing pollution caused by consumption on the move, a so-called European deposit scheme. The Commission did not intend to introduce such a scheme, after a feasibility study had suggested there would be disproportionate costs, but noted that Member States were free to set up their own schemes. The Commission briefly presented the State of the Energy Union report, as had been done in other Council formations. Four political messages were emphasised: firstly, that energy union was closely aligned with the UN climate process, and that the EU must remain a global leader on implementing low carbon transition; secondly that energy union was something the Commission needed to lead, but that this needed action and engagement from all Member States; thirdly, that the geopolitical challenges on this issue are unlikely to reduce; and finally, that governance was a key issue. The Netherlands presented information on the work programme for their Presidency. Lunchtime Discussion Over lunch, Ministers exchanged views on the latest developments concerning the automobile sector and emissions testing.


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